With great power comes great responsibility – Human rights within the corporate sphere

Amy Sinclair

On Monday 29 August 2016, Amy Sinclair, Chair of ALHR’s Business and Human Rights subcommittee, visited the La Trobe University Law School to present a seminar on business and human rights.

The La Trobe Law and Justice Blog has written about Amy’s visit:

It is well regarded that modern human rights principles aim to avoid repeating the atrocities caused during the Holocaust and endeavours to protect individuals from the abuse of State powers. How then do human rights fall within the corporate sphere? It has been estimated that of the world’s 100 largest economic entities, 51 are companies and not countries, therefore companies have a significant impact on individual lives. Accordingly, there is an expectation that companies should act with a degree of responsibility in the way they conduct their business activities. Human rights principles within business are therefore a way of viewing economic activity through a human rights lens.

The challenge lies within the essence of what a company is, that is a separate legal entity, meaning that they can, and often do, avoid their corporate human rights responsibilities. When dealing with offshore entities, a lack of political will fails to regulate the actions of subsidiaries of Australian companies, meaning that more generally companies are not regulated on a global level, allowing corporate abuses to continue.

“Business and Human Rights is not about philanthropy. It is about how companies go about making their profits rather than how they spend them” – Amy Sinclair

The United Nations Guiding Principles on Business and Human Rights clarifies the role of States and companies when engaging with the human rights law framework. The principles rest on the following three pillars:

  1. State duty to protect – through providing a legislative framework, policy and effective remedial mechanisms for victims;
  2. Corporate responsibility to respect Human Rights – from both States and companies. Companies are to act with due diligence (a process of inquiry and investigation) therefore avoiding infringing on the human rights of others and address the adverse impact with which they may be involved; and
  3. Access to remedial mechanisms from States and companies for victims of human rights violations.

When companies choose to adhere to human rights principles the advantages outweigh any perceived burdens. By engaging with human rights when carrying out their business companies can have access to finance from investors/lending from banks, they can protect their image and branding, they generally retain employees, gain access to Government contracts and differentiate themselves within the corporate marketplace by identifying themselves as an entity which acts responsibly and accounts for their actions.

Where to from here? The future of upholding human rights within the Australian business sphere has potential especially due to the work of ALHR and DFAT to implement a National Action Plan on Business and Human Rights within Australia. The plan is essentially a policy statement by the Government which indicates the measures that will be taken by the Government to implement the United Nations Guiding Principles on Business in Australia and includes 2016 public consultations on the matter.

 This instrument aims to identify where the gaps are and what is to be done when it comes to human rights abuses within the Australian corporations. It fosters accountability, transparency and responsibility which are paramount when dealing with human rights violations within the corporate sphere.

If you are interested in joining ALHR’s Business and Human Rights Subcommittee please contact Amy Sinclair, Chair at bhr@alhr.org.au